Lead Inventor On One Of The Patents Paul Allen Is Suing Over Worries About Litigation Over Innovation

from the not-supporting-innovation dept

We've been covering Paul Allen's move into patent trolling in which he's suing Google, Apple, AOL, eBay, Facebook, Netflix, Yahoo and others over a set of incredibly broad patents, covering things like "recommendations," "alerts" and popping up information in the corner of your screen. The EFF points out that Michael Naimark, the lead inventor on one of the patents, 6,757,682, on "alerting users to items of current interest," has put out a statement about the lawsuit.

He does note that he is contractually obligated to "defend intellectual property to which [he] contributed and to respect confidentiality," and he intends to live up to those obligations. However, he did not sign any kind of "no-speak" or "non-disparagement" agreement, and thus he's comfortable making a general statement expressing concern about how much money is focused on litigation instead of innovation these days:

I am also committed to fostering a vibrant creative culture. Long-term labs like Interval Research don't come along often, and I'm grateful for Paul Allen's support. But the stage is now set for enormous resources, from all sides, to support litigation over innovation. The creative community needs all the support it can muster, and it's a perplexing thought that the money at risk in this lawsuit will likely exceed the annual budget of the National Endowment for the Arts, possibly several times over. It could be hugely significant if all parties commit to something good for the creative community as an outcome.

While the statement is carefully worded and balanced, it's good to see him at least suggest there's a serious problem in how much litigation has taken over for actual innovation.

Re:

Actually it is an either/or question. Either investors give more money to research labs to innovate more or you give at least a portion of that money to a law firm to litigate. Any dollar not spent on innovation/creation is that one potential dollar that was needed to fund a break-through idea/product/etc. but you know that no amount of litigation will even create a break-through.

Re: Re:

You managed to get it all wrong - litigation isn't a stand alone thing. Without research, there is nothing created that can get litigated. Litigation is to secure and maintain the rights (and income) that comes with all that research and development, thus funding future development. Without a robust system to protect the rule of law, the incentives to do the first part (invest in research) is lost.

That is why it isn't an either / or question, it is something that is part of the cycle. What Michael Naimark does is what Mike Masnick often does, which is looking at part of the machine without looking at the overall effects on the system. The researcher seems money that he could use now going to litigation, but he fails to understand that without protections, it is unlikely that companies would fund his work to start with, certainly not at the levels they currently do. It isn't a piece you can just rip out and throw away without hurting other parts of the process.

Not saying you're wrong in saying the guy is making a fallacious argument, but please make sure you're accurate in your accusation. Otherwise, someone may come along any make a Fallacisits' Fallacy against your argument and we'd have nothing but chaos and doom. ;) (see, not a strawman, just a false dilemma)

Wild West - Transnational Corp Style

Interval Research inventor Michael Naimark also said:

"I am also committed to fostering a vibrant creative culture. Long-term labs like Interval Research don’t come along often, and I’m grateful for Paul Allen’s support. But the stage is now set for enormous resources, from all sides, to support litigation over innovation. The creative community needs all the support it can muster, and it’s a perplexing thought that the money at risk in this lawsuit will likely exceed the annual budget of the National Endowment for the Arts, possibly several times over. It could be hugely significant if all parties commit to something good for the creative community as an outcome."

"Finally, I’m committed to that which got us here in the first place: working in a creative, collaborative research setting then making something real of it."

It seems to me that what Michael Naimark is saying is that he is dissapointed that it takes litigation to get large companies to respect others Patent Property Rights.

Mike Masnick constantly acts like he understands the economics of invention business when he is clueless. The fact that opportunities like Interval Research are rare is related to recovering investments. The amounts involved in Interval's litigations and many others demonstrate that large entitlement minded companies are stealing on a grand scale.

It is a shame that it takes litigation in order for inventors and invention producing companies to be compensated. The invention business is much like the wild west, and invention stealing large companies have forced inventors to have their own gunslinger in tow in the form of a litigator. Fault for the necessary to litigate lies completely with companies who act as if they have an inalienable right to to "innovate" through unauthorized use of inventors property.

Re: Cause and Effect - Theft is cause of litigation.

Your rather brief answer fails to address any of the issues we are discussing. You are basing everything on the unproven assumption that so-called "theft" of inventions slows progress as a whole.

Your average consumer does not care about the "theft" of an idea. The marketplace and the economy do not care about the "theft" of an idea. Ultimately the only important measure is the speed of progress and innovation: the ease and frequency with which new inventions are brought to market as useful products that improve the quality and sustainability of life. There is a great deal of evidence to suggest that this happens faster when new inventions are not tied down with the artificial property restrictions created by patent and copyright law. Patents create monopolies, which benefit certain individuals at a cost to the marketplace as a whole - or at least arguably so. So if you want to launch a defence of patent litigation on the basis that it protects these artificial property rights, you first have to demonstrate that those artificial property rights are beneficial to begin with.

Re: Wild West - Transnational Corp Style

Re: Wild West - Transnational Corp Style

Much like the wild west, many of the ownership claims made by inventors are broad, bogus and untenable. History has shown us that discovery is often easier than development. Any cowboy can ride out over an open vista and claim it as his own - but someone has to clear the land and build the town and make it useful, or else nobody gives a damn. If the cowboy thinks he deserves to rest on his laurels and never work again, then he has become a drain on society. If he decides to make his living by shooting anyone who tries to build there and stealing their boots, then he has become a menace.

Re: Wild West - Transnational Corp Style

”It seems to me that what Michael Naimark is saying is that he is dissapointed that it takes litigation to get large companies to respect others Patent Property Rights.”

An interesting interpretation of someone else’s words. I’d be interested in hearing Mr. Naimark’s reaction to your interpretation… the reason will become clear in a moment…

”Mike Masnick constantly acts like he understands the economics of invention business when he is clueless. The fact that opportunities like Interval Research are rare is related to recovering investments. The amounts involved in Interval's litigations and many others demonstrate that large entitlement minded companies are stealing on a grand scale.

…and here would be the reason. Someone expresses an interpretation of someone else’s opinion that differs from your own, and you accuse him of being clueless. Interesting.

Further, you go on to claim that the monies involved in the litigation demonstrate “large entitlement minded [sic] companies are stealing on a grand scale”. Care to provide any evidence to support this? Or is that more of your opinion that we are free to disregard on the merits of its worth?

“It is a shame that it takes litigation in order for inventors and invention producing companies to be compensated. “

Yeah, because gods forbid that the market, in an open-market economy, be the deciding factor on which products prosper and which ones don’t. If your competitor offers a product better and cheaper than yours, why should the law dictate which I buy? That's a monopoly. And with a patent, it's a government-granted monopoly. If it's there to help you recoup for a limited time, fine. But if you're not even trying to recoup in the market (i.e. sitting on the patent and not doing anything with it or you bought the patent as a lawfirm), why should the law stop someone else from getting a product to the market that the consumers want?

The invention business is much like the wild west, and invention stealing large companies have forced inventors to have their own gunslinger in tow in the form of a litigator. Fault for the necessary to litigate lies completely with companies who act as if they have an inalienable right to to "innovate" through unauthorized use of inventors property.

Bullshit. They have a choice. There was an article not too long ago here that showed a company who found out their product was being counterfeited responded by saying “you know what, we’ll make ours better.” Instead, litigants that you defend here are choosing to spend time, effort, and money on fighting instead of improving their idea.

And you know what… I’m not saying it’s the wrong decision… not even most of the time… but it’s still a choice. You don’t get to assign blame as you see it and then absolve these litigants from their own responsibility for their choices. You're making some broad generalizations about 'idea pirates' and then blaming them for the actions of lawyers who are making a buck on the suit, not on the pursuit of innovation.

"theft" of an idea

Patents are not granted for "ideas". They are granted for specific solutions.

The public does care about prosperity and jobs. When developed countries are competing with low wage developing countries patent property rights are the source of higher profit margins which support paying higher wages.

No business can produce the kind of profits needed to sustain our standard of living reselling commodities. If anyone on TechDIRT actually understood economics they would know that unpatented products and services profit margins drop to the lowest sustainable rate.

TechDIRT Drivel

"Bullshit. They have a choice."

Inventors with patents have one choice, the law allows them to sue for damages. Big company steals and when caught whines about mythical trolls.

Inventor sues, wins on merit, and big company whines about trolls and injustice. Take RIM as an example, they paid $612 million and whined about invalid patents, except when the dust settled five years later there were still infringed claims.

Re: TechDIRT Drivel

Oh, my mistake... I mistook you for a valid discussion participant who actually had something to say. Now I see you're here to make ad hominim attacks with no backup of your statements. Thank you for clarifying that for me.

"Inventors with patents have one choice, the law allows them to sue for damages. "

Looks like someone liked our authentic Ristretto for iPad so much that they decided to copy it. This email was forwarded to us by a customer in Norway. Can any of you translate it for us? Our best guess is that this product is made in somewhere in Asia (not Norway) though we don't know for certain. Are we mad? Not really. We're too busy designing the next generation of laptop bags -- the copycats will just have to keep up with us.
-Creator of original product

So, how was that TD drivel?

For a very brief moment, I mistook you for someone who had something intelligent to say. Again, thank you for showing me that talking to you is a waste of my time... a waste that won't continue after this. Don’t worry about responding to my questions, I’m sure the answers would be little more than further, baseless attacks with no evidence or insightful comment.

Re: Re: "theft" of an idea

"You do know what "sustainable" means, right?"

Economics 101

Lo profit margins equals low wages and slow growth. Patents give an inventor the right to control the invention which they have taught via the patent for twenty years from date of filing. This compensates the inventor for both the act of inventing and the time and cost of teaching. It allows the inventor to recover their investment, and gives them profits to fund subsequent inventions.

If all inventions can be copied immediately there is no incentive to invent and all inventions are immediately transferred to the lowest wage countries.

The end result is no jobs in the countries who people are inventing, a collapsing economy, and a drop in the standard of living of developed countries. That drop eventually places those countries standard of living at or near that of the developing countries.

Re: "theft" of an idea

Raise your hand here if you have a degree that deals in economics and business. Mike? Don't be shy. Here... (raises own hand). Now you won't be alone.

"...they would know that unpatented products and services profit margins drop to the lowest sustainable rate."

http://techcrunch.com/2010/08/01/opportunities-in-the-patent-free-zone/
Yeah, look at this horrible situation where innovation cannot happen outside of the patent system. This horrible place where... oh, wait, where innovation is not only booming but a healthy economy exists for technology without innovation. But I guess that's Techcrunch drivel instead of Techdirt drivel.

Re: Re: "theft" of an idea

Actually, Mike has shown himself many times to be very, umm, liberal with the application of the basics of economics, and sometimes ignores the important bits.

As for the techcrunch article, mostly it proves what has been stated over and over again: countries (such as Japan in the 60s) ignore IP laws and take as much from everyone else as they can to quickly try to build up their economy, using their low wage status and manufacturing skills to take over world markets. However, when they reach a certain point (as China is now) they start to actually put money into research (not replication) and they start to move to protect their IP as well.

It is actually pretty basic, it's something they teach in school. Apparently not everyone read the course material or remembered it after getting their MBA.

Re: Re: Wild West - Transnational Corp Style

Bullshit. They have a choice. There was an article not too long ago here that showed a company who found out their product was being counterfeited responded by saying “you know what, we’ll make ours better.” Instead, litigants that you defend here are choosing to spend time, effort, and money on fighting instead of improving their idea.

I think you are refering to the article about the account software and service company. It was a bit of a misleading story, however, because in the end the customers are not coming to them for the software as much as the service. They make a good software product, but they are surviving and growing on good customer relationships (which is something that cannot easily be copied).

It should be noted that "success" in this case was less than 50 new customers total.

What may appear to work often needs to be ripped apart to look at what makes it go. Red Hat is one company that pops up here often. Their products are as much about the service and "packaging" (think of it a glueware) that makes the product usable. It isn't the underlying product that is important.

But when you look at a purely manufactured good such as pharma products with huge outlays before production but often relatively low production costs, it is easy to see where the lack of patent protection can make it very hard to have a workable business model. When the fixed costs, the up front costs, and all other costs before production represent a huge percentage of the total unit cost, piracy will always be an issue.

Legal action exists because some companies are unable to control themselves, and insist on violating patents to try to make a buck. The legal action isn't the first option, but failing all other remedies, it is the one that ends up getting taken. If you mistake legal action as a "business model", then you have entirely missed the point of the exercise.

Re: Re: Re: "theft" of an idea

I'm sorry... are we reading the same article?

"Most countries outside the U.S. and Europe lie in a Patent-Free Zone—where companies have not filed patents because they believe there is no market for their goods. So this intellectual property is available to anyone in those nations who can find a use for it."

Sounds like the 'patent holders' are the ones who are ignoring the patent, not the government. It's showing how these emerging markets are flourishing because of the lack of patents.

Re: Re: "theft" of an idea

"Raise your hand here if you have a degree that deals in economics and business. Mike?"

Which goes to show how there is a difference between jumping through academic hoops and actually understanding an issue. In theory higher education is supposed to instill reasoning but the reality is it often does not.

I am constantly stunned by how limited most college graduates are. One example was a 26 year old I employed. They were dealing with a problem and I explained that one grows professionally as a result of overcoming close encounters with the "Peter Principle".

The person had a blank look, so asked if they knew what the "Peter Principle" as about. Their reply, as it something sexual.

It seems that most of TechDIRTers need to read about the "Peter Principle" because it is pretty clear that they have not grown from close encounters, rather they have succumbed.

Faulty Reasoning.

"Either investors give more money to research labs to innovate more or you give at least a portion of that money to a law firm to litigate. Any dollar not spent on innovation/creation is that one potential dollar that was needed to fund a break-through idea/product/etc. but you know that no amount of litigation will even create a break-through."

Faulty reasoning. The problem is that no funds flow for more research unless litigators are brought in to extract those dollars.

So an inventor who does not retain a lawyer gets a big fat %100 of $0.00 and one who retains a lawyer typically nets %40 to %50 of a large number of dollars, often exceeding $100 million which they can use to produce more inventions and they often use income from their first inventions to build their own companies.

Re: Re: Re: Re: &quot;theft&quot; of an idea

"So wait, education is bad? This coming from the guy who posted his version of "Economics 101" above?"

No, education is not bad. But those who are good at working the education system are not necessarily good at applying what they learned. Plenty of people can regurgitate what was taught without being able to apply it or build upon it.

The essence of being an inventor is being able to extrapolate beyond what they learned.

It is very clear that whatever Mike learned that he does not understand.

Re: Faulty Reasoning.

So an inventor who does not retain a lawyer gets a big fat %100 of $0.00 and one who retains a lawyer typically nets %40 to %50 of a large number of dollars,

So is it your position that the only way to profit off inventions is to sit back and sue people? Actually turning your invention into a product is out of the question?

Your definition of "inventor" sounds like a waste of education and resources to me. I will always support the people who are doing something useful, not the ones who are demanding their cut of someone else's productivity.

Re: Re: Re: "theft" of an idea

And where did your 'knowledge' and expertise come from? Divine impartment… or public education? Or, as seems to be the case, a crackerjack box?

By the way, nice shift of conversation instead of addressing points that are raised. 'Round here in these uneducated parts we call that a Red Herring (or sometimes a straw man). Nice dodge... if I didn't know better (and I don't), I'd almost think you're Anonymous himself.

Re: Re: Wild West - Transnational Corp Style

"You don't get to assign blame as you see it and then absolve these litigants from their own responsibility for their choices. You're making some broad generalizations about 'idea pirates' and then blaming them for the actions of lawyers who are making a buck on the suit, not on the pursuit of innovation."

The court assigns blame, not I. Defendants who lose, and most do, are found to be at fault.

Courts carefully examine evidence and each sides arguments. They have access to much more information than anyone else. Most of the time they make the correct determination and there are checks in the form of appeals.

It is interesting that a number of big companies who are routinely found to be in the wrong are associated with TechDIRT, and that may be why TechDIRT Drivel flows freely.

Lawyers are not at fault, they are advocates and mercenaries. This is the essence of rule of law. I feel that it is preferable to trial by combat.

Re: Re: Faulty Reasoning.

"not the ones who are demanding their cut of someone else's productivity."

The point is that an inventor produced the most important parts of what drove productivity. In other words you are saying that you think that what marketing hucksters do is more important than what the inventor did. That is not the case.

Re: Re: Re: Faulty Reasoning.

See, there's your faulty assumption right there. The invention is not necessarily the most important part - or at least not the biggest challenge. If you think it goes straight from invention to marketing, you are sorely mistaken. What an audacious sense of entitlement you must have to dismiss all the innovative engineers who don't just figure out how to do something but who actually do it as well.

So go ahead: invent stuff and whine that you aren't getting paid. But you won't be getting any of my money - I'll be giving it to the people who bring me products and services that I want. And if I find out that you didn't get your "fair cut" while sitting in your office at PIAUSA, I won't be shedding any tears.

Re: Re: Re: Re: Re: Faulty Reasoning.

And without product development - the harder part - there is no point in having those inventions.

I'm not opposed to inventors getting paid. I'm opposed to them assuming they automatically deserve to get paid for every iteration of their invention even when much harder-working and more resourceful people have picked up the torch and ran with it.

Re: Re: Re: Re: Re: Re: Re: &amp;quot;theft&amp;quot; of an idea

So far in this thread you have not provided a single fact. Not one citation, not one shred of data, not one study or even one anecdote. You have simply parroted the insistent statement that patents and patent litigation are necessary to protect inventors. As far as I can tell you don't have a thought in your head.

Re: Re: Re: Re: Re: Re: Faulty Reasoning.

"And without product development - the harder part - there is no point in having those inventions."

You have missed the point of patents and that is that they teach. Even if a product is not immediately produced a documented invention often spawns additional inventions.

Sometimes this happens either because someone builds on the foundation laid by proceeding inventions or because someone develops an alternative in order to avoid paying another inventor. In the latter case then the two inventions compete for market share and usually the best wins the market.

Re: Re: Re: Re: Re: Re: Re: Faulty Reasoning.

"You have missed the point of patents and that is that they teach. Even if a product is not immediately produced a documented invention often spawns additional inventions."

Hmm... and I thought the point of a patent was to give a government-granted temporary monopoly on a product or method for the purpose of allowing the inventor/innovator to recoup the cost of creation and development. How silly of me.

Re: Re: Re: Re: Re: Re: Re: Re: Faulty Reasoning.

"I thought the point of a patent was to give a government-granted temporary monopoly on a product"

This is like saying that you should not be able to drive a car unless you are capable of building it from the ground up. Or lets say you want to want to write for a living, using their reasoning you should have to make your own paper, ink, and print it.

Big companies constantly try to foist this idea on people but it is not the case. A patent gives the inventor the right to exclude others from use. Those who want to use get the right to do so by paying a royalty.

There is nothing in law that says an inventor must produce an end user product. People have different skills. Producing an invention is a skill which produces valuable knowledge. The act of teaching the invention leads to a patent and the patent is itself a product. It details how to practice an invention.

Re: Re: Re: Re: Re: Re: Re: Re: Re: Faulty Reasoning.

Ok... I get what you're saying. A patent-holder who is unable to physically produce a product can teach the idea to someone who can build it for them... OK... but that doesn't address the point that the actual purpose of a patent is to grant sole control over an idea to the holder.

The point of the patent is not to teach others what to do with an idea. And even if you want to allow the fact that the practice of a patent is to teach others to help get an innovation or invention to market, that CERTAINLY does not address the fact that these litigators who sit on patents and don't teach others... who sit on them and wait until someone tries to do work on their own and then sue them... are not teaching anything.

Let's take RIM for example... Where's the teaching from the owner of the (still, dubiously broad) patent who did nothing with it except keep it in a drawer, who then sued the first person who actually did the work on the same idea? I don't really care if you believe that RIM had the idea independently or if they somehow magically gleaned it from the owner's head... it's irrelevant to this conversation. If the point of a patent is to teach, where is that exemplified in this scenario? Who taught whom?... other than the lesson of the Patent Troll.

So, again, the point of a patent is to grant sole control… the ideal practice of a patent is to use that control to teach others to help get product/idea to market… but we see deliberate action against that ideal because it seems to be far more lucrative to use the control to sue people instead of innovate. Again, this is against your teaching ideal.

your words, not his

"see him at least suggest there's a serious problem in how much litigation has taken over for actual innovation"

Those are your words, not his.

Call it what you will...patent hoarder, patent troll, non-practicing entity, etc. It all means one thing: “we’re using your invention and we’re not going to pay”. This is just dissembling by large infringers to kill any inventor support system. It is purely about legalizing theft.

Prior to eBay v Mercexchange, small entities had a viable chance at commercializing. If the defendant was found guilty, an injunction was most always issued. Then the inventor small entity could enjoy the exclusive use of his invention in commercializing it. Unfortunately, injunctions are often no longer available to small entity inventors because of the Supreme Court decision so we have no fair chance to compete with much larger entities who are now free to use our inventions. Worse yet, inability to commercialize means those same small entities will not be hiring new employees to roll out their products and services. And now some of those same parties who killed injunctions for small entities and thus blocked their chance at commercializing now complain that small entity inventors are not commercializing. They created the problem and now they want to blame small entities for it. What dissembling! If you don’t like this state of affairs (your unemployment is running out), tell your Congress member. Then maybe we can get some sense back in the patent system with injunctions fully enforceable on all infringers by all inventors, large and small.